Flood Insurance Relief Act
Summary
The Flood Insurance Relief Act aims to amend the Internal Revenue Code of 1986 by introducing an above-the-line deduction for flood insurance premiums. This deduction would be available to individuals who pay qualified flood insurance premiums on their property. The bill includes income limitations, restricting the deduction to taxpayers with adjusted gross incomes below $200,000 (or $400,000 for joint returns).
Expected Effects
The primary effect of this bill would be to reduce the tax burden on individuals who pay for flood insurance. This could incentivize more homeowners in flood-prone areas to purchase flood insurance, potentially reducing the financial impact of flood events on individuals and the government. It could also lead to a slight decrease in federal tax revenue.
Potential Benefits
- Provides tax relief to homeowners in flood-prone areas, making flood insurance more affordable.
- Encourages more homeowners to purchase flood insurance, reducing individual financial risk.
- Could lead to greater financial stability for families affected by floods.
- Simplifies tax filing for eligible individuals by offering an above-the-line deduction.
- May indirectly stimulate the insurance market by increasing demand for flood insurance.
Most Benefited Areas:
Potential Disadvantages
- The income limitations exclude higher-income individuals from receiving the tax benefit.
- Could slightly reduce federal tax revenue, potentially impacting other government programs.
- May disproportionately benefit homeowners in wealthier areas prone to flooding.
- The complexity of defining 'qualified flood insurance premiums' could lead to confusion.
- The deduction may not fully offset the cost of flood insurance for some homeowners.
Constitutional Alignment
The Flood Insurance Relief Act appears to align with the general welfare clause of the US Constitution (Preamble). By providing financial relief related to flood insurance, the bill aims to promote the well-being of citizens, particularly those in vulnerable areas. The act falls under the powers granted to Congress to lay and collect taxes (Article I, Section 8), and to make all laws which shall be necessary and proper for carrying into execution the foregoing powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).